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Sunday, 15 March 2009

Emirates, the biggest customer for the Airbus SAS A380, said its confidence in the superjumbo remains unchanged after German magazine Der Spiegel reported breakdowns had grounded the new aircraft for 500 hours.

The Dubai government-owned carrier, which already took delivery of four A380s, met with officials of Toulouse, France- based Airbus to discuss technical issues with the A380, the airline said today in an e-mailed response to questions. “Technical issues are expected with new aircraft. Naturally we want these to be resolved as soon as possible.”

A delegation from Emirates cited a series of defects with the plane when it visited European Aeronautic Defence & Space Co. last month, Der Spiegel reported yesterday in a preview of an article in its latest edition. In a 46-page presentation, Emirates’ officials said breakdowns had grounded the airline’s A380s for 500 hours, the magazine reported, without saying where it got the information.

EVEN in flush times, CityCenter was an ambitious undertaking. Sprawling over 67 acres on the Las Vegas Strip, it was to contain four hotels, one of them with more than 4,000 rooms, and hundreds of condominiums offering hotel services.

The owners — MGM Mirage, the publicly held casino operator, and Dubai World, an investment arm of the Dubai government — have together spent nearly $9 billion on CityCenter, which they hope to open by December.

But the demand for hotel rooms in Las Vegas has softened in the economic downturn, and MGM Mirage, which is controlled by the financier Kirk Kerkorian, is struggling to raise funds to complete the project. The company said in a recent filing with the Securities and Exchange Commission that it might default on some of its loans later this year.

Harmonising real estate regulatory laws across the UAE would attract global investors and increase transparency, according to a real estate investment and development information network.

"Common regulations across all the emirates would definitely benefit the country as they would make it easy for international investors to invest here," Ahmet Kayhan, CEO of Reidin.com, told Emirates Business in an exclusive interview.

"This would help to bring a number of international investors into this part of the world and create more transparency in the country. Owing to the federal nature of the UAE it is understandable that every emirate has its own set of rules. However, common regulations are possible and would be beneficial," he said.

Kuwait may join Oman to opt out of the GCC monetary union next year and both the countries could join the union later, a senior economist close to the matter said.

Jarmo T Kotilaine, Chief Economist of Bahrain-based NCB Capital Fund (a subsidiary of National Commercial Bank of Saudi Arabia), said the decision to form a monetary union and introducing a common currency is now hinged on two questions. First being the name of the common currency. And second, where will the central bank be located? "For all that we know, discussions are currently being carried out on these issues. All the GCC countries are lobbying to have the central bank located on their soil," Kotilaine said.

Oman and Kuwait have had divergent views with regards to the GCC union. While Oman has been reluctant to accept a common currency, Kuwait has de-pegged its currency to the dollar (to which all the GCC currencies are pegged) and has pegged it to a basket of currencies. "Other GCC countries may therefore go ahead and form a union. These two countries may join later," said Kotilaine, who has been researching on the monetary union and had also published a report on it.

Ras Al Khaimah Investment Authority (Rakia) has mandated Standard and Poor's for a credit rating in an effort to attract more investment into the emirate, a top government official said.

"We are going in for a credit rating and have appointed S&P for the purpose. The rating should not be viewed as our plans to tap the fund market, but is to show the world how safe Ras Al Khaimah is for investment. We expect to get the rating in the next three to four months," Dr Khater Massad, Chief Executive Officer of Rakia, told Emirates Business.

Ruling out plans for overseas expansion for Rakia, he said: "It was a directive from emirate's top leadership to invest and develop the emirate. And we are now concentrating on development of RAK."

The UAE has one of the world's most successful models in the tourism sector, and Sharjah has been always committed to making a significant contribution to the UAE's growth in the tourism sector, said Sheik Sultan bin Ahmed Al Qassimi, Chairman of the Sharjah Commerce and Tourism Development Authority (SCTDA).

"The UAE is capable of countering the impacts of the current global economic crisis", he stressed "The impact of the global economic crisis on Sharjah's tourism sector since the beginning of the year has been slight, as evidenced by the SCTDA's statistical report issued at the end of January, proving the resilience of the emirate's tourism sector", he added in statements on the sidelines of the SCTDA's participation in the International Tourism Bourse (ITB), being held in Berlin from 11 to 15 March 2009.

He stressed that the declining demand for Sharjah's hotels is normal, and we are doing our best to stimulate the hotel sector in order to achieve the expected growth this year, a growth that will be positively reflected in the tourism sector in the emirate.' "This year has seen a decline in the emirate's hotel rates as a result of the ongoing global economic crisis. The decline is normal, as there has been an urgent need to correct the unreasonable 50 to 200% increase in hotel rates seen in the last three years in order to deal with the crisis in a more pragmatic way," he added.

OPEC, the group of oil producing countries that together account for about 40% of global petroleum production are meeting in Vienna this weekend. They are reportedly considering production cuts in addition to those previously announced (a cumulative 4.2mbd).

By all accounts OPEC members are worried about demand, and they should be. The outlook for the global economy suggests that demand for oil and oil products will continue to fall, particularly in the OECD, but also in most emerging economies – and the pace of demand growth slowed sharply even in countries like China that accounted for much of the demand growth in recent years. 2009 is likely to mark sharp demand reductions for crude oil - and that suggests oil prices may continue to be weak despite production cuts.

As with most economic projections, the outlook for global oil demand keeps coming down, the IEA, the US DOE and OPEC’s own researchers have continued to scale down estimated demand. OPEC’s most recent report, released Friday March 13, underscored these worries and could have been laying the groundwork for further cuts.